Sri Lanka shares weaken, Indian Oil unit gains as oil prices fall

Sept 03, 2008 (LBO) – Sri Lankan shares fell again Wednesday with the local unit of Indian Oil Corp (IOC) gaining as its earnings outlook improves on falling oil prices, brokers said.

The indices were dragged down mainly by the fall in Dialog Telekom, which ended down 25 cents at 10.75 rupees with 314,100 shares traded.

Sri Lanka Telecom also fell, down by 50 cents to 45.50 rupees on small volumes.

JKH was down 75 cents to 99 rupees with 255,800 shares done while CIC went up 1.61 percent or 75 cents to 47.25 rupees with 283,700 shares traded

John Keells Hotels was the most active in terms of volumes with over 1.3 million shares done. The share ended flat at 7.50 rupees.

Bogala Graphite, which was pushed up on speculation by small investors in recent days, shed 50 cents to end at 26 rupees.

To receive instant alerts from LBO on your Dialog mobile type ‘lbo’ and send to 678

The All Share Price Index fell 0.28 percent (6.63 points) to 2,393.71 while the Milanka was down 0.68 percent (18.71 points) at 2,750.58.

Turnover was 183 million rupees.

Lanka IOC was the most actively traded stock with 742,900 shares changing hands. The share ended up 4.12 percent or one rupee at 25.25 rupees.

“The company is seen benefiting from the fall in oil prices,” said Dihan Dedigama of Asia Capital.

Oil prices fell to 107 dollars a barrel after the US government decided to release crude stocks from its strategic reserve after Hurricane Gustav had brought a halt to energy production in the Gulf of Mexico.

Oil tumbled below 105 dollars at one stage on Tuesday to reach its lowest levels for four months after Gustav appeared to have wreaked less damage than feared on Gulf of Mexico US energy facilities

“There was also buying interest in John Keells Holdings and Chemical Industries (Colombo) (CIC),” Dedigama also said. “In all value stocks, there was buying interest.”